A bank features a savings account that has an annual percentage rate of 3.5 % with interest compounded monthly. Courri deposits $4,000 into the account.

To solve for the future value of Courri's deposit in the savings account with interest compounded monthly, we will use the formula for compound interest:

\[
A = P \left(1 + \frac{r}{n}\right)^{nt}
\]

Where:
- $A$ = the future value of the investment/loan, including interest
- $P$ = the principal investment amount (the initial deposit), which is $4,000
- $r$ = the annual interest rate (decimal), which is 3.5% or 0.035
- $n$ = the number of times that interest is compounded per year (monthly compounding means $n = 12$)
- $t$ = the number of years the money is invested or borrowed for

Let me know how many years you want to calculate this for, and I can help you find the future value.

Would you like me to continue with a specific time frame?

---

Here are 5 related questions to expand on this:
1. How does the compound interest formula differ from simple interest?
2. What effect does increasing the compounding frequency (e.g., daily instead of monthly) have on the future value?
3. If Courri makes additional deposits each year, how does that impact the future value?
4. How does the annual percentage yield (APY) differ from the APR in this context?
5. What would happen to Courri's investment if the interest rate were variable instead of fixed?

**Tip:** The more frequently interest is compounded, the more interest will accumulate over time!

A bank features a savings account that has an annual percentage rate of 3.5% with interest compounded monthly. Courri deposits $4,000 into the account.

Learn how to calculate the future value of a $4,000 deposit in a savings account with a 3.5% annual percentage rate (APR), compounded monthly. This tutorial walks you through the compound interest formula A = P(1 + r/n)^(nt) and covers essential concepts for students in Grades 9-12.

Math Problem Statement

Solution

Ask a new question for Free

By Image

Math Problem Analysis

Mathematical Concepts

Formulas

Theorems

Suitable Grade Level

Related Recommendation